China Working to Boost Role in Middle East

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China’s President Xi Jinping gives a speech during the 8th Ministerial Meeting of China-Arab States Cooperation Forum at the Great Hall of the People in Beijing on July, 10, 2018. (WANG ZHAO/AFP/Getty Images)

 

Growing influence in the region helps China accelerate its Belt and Road Initiative.

Chinese President Xi Jinping delivered remarks in Beijing on July 10 at the eighth ministerial meeting of the China-Arab States Cooperation Forum. Xi’s basic message to the representatives from 21 Arab nations and to the secretary general of the Arab League was that China seeks to become more involved in the Middle East.

He stressed the importance of Sino-Arab relations, saying, “Arab states and China are natural partners.” Continue reading

The Art of the Deal Vs. The Art of War

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At the risk of beating a dead horse on the topic of trade wars, the sequence of unfolding events is making me cautious near term.

Let me explain why.

First, for all those market pundits, analysts and investors who are following the twists and turns of this trade tiff using Trump’s Art of the Deal as their playbook…

I have a better read for you. Pick up a copy of Sun Tzu’s, The Art of War instead! Continue reading

The Road to War: China vs the US

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In 2016 Steve Bannon, President Donald Trump’s former chief strategist, declared that there was no doubt, in his mind, that the US would go to war with China in the South China Sea in the next five to 10 years.

A US-Chinese military conflict would be on top of a vow by Trump in his inaugural presidential address, to not only take on radical Islamic terrorism but to “eradicate it from the face of the Earth.” This would be done by building up America’s already supreme military. “Our military dominance must be unquestioned,” the billionaire businessman, who now controlled the most powerful political office in the world, declared in his first address to the nation.

A year and a half after that speech, the United States is not at war with China, but its economic saber-rattling is arguably the beginning of a confrontation between the world’s largest and second-largest economies. Trump’s tariff threats against not only China but Europe, Canada, Mexico and its other trade partners, are also symbolic of a shift in US foreign policy towards a more isolationist stance – one that may not strictly be due to Trump’s belligerent personality. This article will get into the antecedents of this economic and military showdown and point the way to some possible future scenarios, including a war in space. Continue reading

Did the President Just End Theresa May’s Career?

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He insists his comments to The Sun newspaper critical of the UK prime minister were ‘fake news’ that didn’t demonstrate his complete views.

The United Kingdom’s The Sun newspaper published a report today following an exclusive interview Thursday in which President Donald Trump criticized Prime Minister Theresa May’s approach to Brexit and how it may impact trade with the U.S. Continue reading

Trump Calls the European Union a Foe: ‘What They Do to Us in Trade’

 

President Donald Trump said during a Sunday interview with CBS News anchor Jeff Glor that the European Union is a foe.

“What’s your biggest competitor, the biggest foe globally right now?” Glor asked the president

“Well, I think we have a lot of foes. I think the European Union is a foe, what they do to us in trade,” Trump said. “Now, you wouldn’t think of the European Union, but they’re a foe.” Continue reading

Rickards: Here’s Where the Next Crisis Starts

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So many credit crises are brewing, it’s hard to keep track without a scorecard.

The mother of all credit crises is coming to China with over a quarter-trillion dollars owed by insolvent banks and state-owned enterprises, not to mention off-the-books liabilities of provincial governments, wealth management products and developers of white elephant infrastructure projects.

Then there’s the emerging-markets credit crisis, with Turkey and Argentina leading a parade of potentially bankrupt borrowers vulnerable to hot money capital outflows and a slowdown of growth in developing economies.

Close on their heels is the U.S. student loan debacle, with over $1.5 trillion in outstanding debts and default rates approaching 20%. Continue reading

Leaked Chinese Memo Warns Of “Thucydides Trap” With US, “War Is Unavoidable”

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A series of leaked internal documents reveal that China’s military reforms are aimed at allowing Beijing to “manage a crisis, contain a conflict, win a war” and overtake the United States in military strength, according to the Express.

The leaked documents were published by the Central Military Commission in February for the purpose of spreading President Xi Jinping’s “thought on strengthening the armed forces”.

If the reforms go ahead, they will lead to heightened tensions with China’s neighbouring countries, including Japan, in the East and South China Seas and the US. –Express Continue reading

Russell Napier: “Trade War Is The Beginning Of A New Global Monetary System”

A Country Matures, An Exchange Rate Declines

After two weeks on the road visiting clients your analyst returns with a better view of the consensus outlook. There is, though, much in the consensus to disagree with. In particular it seems peculiar that the consensus believes the democratically elected government of Italy, with policies entirely contrary to EU membership, will be put through the bureaucratic meat grinder in Rome and Brussels and turned into EU sausage, in a similar process that minced the political representatives of Greece.

While this might well be the case, it is hard to understand that the grinding destruction of this democracy, even if it is only moderate compared to the Greek experience, can be anything but bad for growth and asset prices in the EU. Disciplining these politicians to abandon their manifesto promises and follow the ways of the EU is highly unlikely to be a painless experience, either for Italy or the rest of the EU. Nonetheless, investors are content to believe that a painless disciplining of Italy’s elected representatives is all but inevitable. We shall see.

Perhaps the most prevailing consensus view is that the recent weakness of the RMB represents a Chinese counter-punch in the trade war with the US. Coming when it does, it is easy to see the accelerated decline of the RMB as a tactical and not a strategic move. Comments by the PBOC on July 3rd have probably reassured many investors that the managed exchange rate regime is not at risk and that the RMB will continue to be managed against a basket of currencies. Your analyst does not agree. Continue reading

Iran Threatens Gulf Oil Producers

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(Photo Credit: Asharq al-Awsat English Archive)

 

Wednesday, while most Americans were otherwise preoccupied with the Independence Day holiday, Iranian President Hassan Rouhani threatened an open act of war against his neighbors:

“The Americans have claimed they want to completely stop Iran’s oil exports. They don’t understand the meaning of this statement, because it has no meaning for Iranian oil not to be exported, while the region’s oil is exported. The Americans say they want to reduce Iranian oil exports to zero… It shows they have not thought about its consequences.” Continue reading

China asks European Union to form ‘ANTI-US’ grand ALLIANCE in SHOCK move

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Chinese state media has promoted the message that the EU is on China’s side

 

CHINA has asked to form an alliance with the EU against the US as the spectre of an international trade war looms and is due to start this Friday.

Donald Trump is due to slap as much as $34billion (£25 billion) of Chinese exports with 25 percent tariffs.

In response, China asked the EU, which is the world’s largest trading bloc, for an alliance against the US while promising to open up more of China’s economy to European competitors.

Continue reading

Trump To OPEC ‘Allies’: “Reduce Oil Prices Now” Or Lose US Defense Shield

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Update: For the umpteenth time this year, President Trump has lashed out at OPEC over soaring oil prices (and therefore gas prices): “The OPEC Monopoly must remember that gas prices are up & they are doing little to help. If anything, they are driving prices higher.”

Then Trump escalated his rhetoric, appearing to threaten the withdrawal of support unless action is taken “…the United States defends many of their members for very little $’s. This must be a two way street. REDUCE PRICING NOW! “

This is coming after reports that Trump asked the Saudis to increase production by 2mm barrels and that they agreed.

President Trump has not been shy of expressing his views to OPEC… Continue reading

The Origin of Contagions lies in the Common Reserve Currency

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The question of money supply and inflation has been erroneously been set in stone predominantly by the debasement of Spain and Britain during the period of Henry VIII. This was really a period where there were various countries and their currency completely relied on the exchange market in Amsterdam, which was based entirely upon their metal content. This period was far less judgmental insofar as we have today where currencies rise and fall purely on anticipation of political events. During the middle ages, this influence of anticipating future value based upon possible political decisions was not readily dominant and the coins of one nation were compared entirely on their metal content.

For example, because of the French at war with Britain, they created a wave of inflation that spread like a contagion to other nations, namely Spain and Italy, because money was commodity based using gold and silver. In this way, there was really a single currency base among nations and the problems of one would be exported to all others by their debasement. Continue reading

Taiwan Doubles Down On U.S. LNG

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LNG Vessel. Source: OilPrice

 

Taiwan, which has seen increased military exercises off its coast by Chinese forces this year, has just inked a major energy deal with a U.S. energy firm.

On Monday, Taiwan’s CPC Corp., a major LNG importer, announced a preliminary deal to buy liquefied natural gas (LNG) from U.S. based LNG producer Cheniere Energy for a period of 25 years. CPC signed a Heads of Agreement to purchase 2 million tonnes of LNG annually from the major gas exporter, which is gearing up to start exports from its second export plant at Corpus Christi, Texas. Continue reading

China Has Quietly Implemented A 6% Across The Board ‘Tariff’ On All US Imports

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Nothing happens by accident in China and this massive drop in the value of the Yuan mirrors the violent devaluation, snap in 2015…

 

Trump and Xi have spent much of the last few weeks tossing tariff grenades across the Pacific Ocean as retaliatory retaliations grow ever stronger in rhetoric and potential escalations.

Then this week, Trump seemed to back away from his most serious threats (direct Chinese investment restrictions).

We wonder if this is why… Continue reading

China and India Establish “Oil Buyers’ Club” to Counter OPEC

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On June 11, major Chinese and Indian oil companies started a formal meeting in Beijing, discussing the establishment of an “oil buyers’ club” to negotiate better prices with OPEC countries. The chairman of China’s biggest energy company China National Petroleum Corporation (CNPC), Wang Yilin, and the chairman of refiner Indian Oil Corporation both attended the meeting. According to the India Times, the two largest energy consumers together accounted for almost 17% of world oil consumption last year. Should this “oil buyers’ club” become a reality, New Delhi, and Beijing will have greater leverage to negotiate with OPEC about oil prices and will also have a significant say in matters such as importing more crude oil from the US. Continue reading